BBB 4M - Global Marketing2323 [Autosaved].ppt

BBB 4M - Global Marketing2323 [Autosaved].ppt - Marketing...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Marketing in International Business Marketing is the sum of all the activities involved in the Planning, pricing, promotion, distribution and sale of goods and Services to satisfy consumers needs and wants. #1 Global brand?? 2006 2016 In 2001 The Product Life Cycle S MATURITY A L E DECLINE GROWTH S in $ DECISION POINT INTRODUCTION TIME Product Introduction • The product is launched into the market • Businesses are trying to develop brand awareness • Marketing is directed towards early adopters • Eg. Celebrities, athletes, certain buyers • Advertising and promotion are strong Growth • Sales start to increase rapidly as popularity rises • New competitors enter the market by either: • Changing the product slightly • Selling the product for a cheaper price • A fight for market share erupts Maturity • Sales level off but do not decline • New consumers replace old consumers leaving the market • Advertising acts as a reminder to consumers • Larger profits resulting from effective production methods Decline • Sales drop off as businesses fail to attract new customers • Businesses must make changes to the product, price, or promotion to stay in business Businesses that closed in Canada - 2015 Businesses that closed in Canada – 2015/16 Businesses that closed in Canada – 2015/16 Businesses that closed in Canada – 2015/16 Businesses that closed in Canada – 2015/16 Businesses that closed in Canada – 2015/16 Businesses that closed in Canada – 2015/16 Decision Point 1. Reformulate, repackage, or reintroduce the product OR 2. Discontinue production Non-traditional Product Life Cycles • Niche •Short growth stage followed by a long maturity stage •Dominate one section of the market and target a particular group of consumers Non-traditional Product Life Cycles • Seasonal •Sales vary depending on the season Non-traditional Product Life Cycles • Fads •Very rapid growth stage and very rapid decline stage •Companies can make or lose a great of money depending on when they choose to leave the market Product Price Place Promotion The Marketing Mix Product Development Product Design 1. Form – What the product looks like Eg. Honda Civic vs. Ford Windstar Minivan 2. Function – What is the product designed to do? Eg. High top running shoes to support your ankles while playing basketball Product Development Packaging • Protects the product from the elements and damage • Provides easy use for the consumer • Labels provide essential information Eg. Nutritional information, ingredients, Product Development Branding • The name, design, or symbol that identifies the good or service. PRICING The amount of money charged for a good or service. INTERNATIONAL PRICING • International marketers must be able to price their product to compete in whatever market they enter. • Items sold in stores are marked up, as the the retailer needs to make money on items it sells. • Many factors influence the price of a product in a foreign market. FACTORS THAT AFFECT INTERNATIONAL PRICING 1.Labour Costs Often is much cheaper in foreign countries than in Canada. A product made in Canada would cost significantly more in most cases. 2.Shipping Costs The cost to ship goods long distances must be factored into their price. 3.Exchange Rates FACTORS THAT AFFECT INTERNATIONAL PRICING 4. Duties and Tariffs Some countries charge a tax on imports to protect local industries. This can add 10-20% to the cost of an item. 5. Legal Costs Modifications to conform to standards in a foreign market can be expensive. Translators New packaging Legal fees Inspection costs. PRICING STRATEGIES 1. SKIMMING – prices are initially set higher than the competing brands – prices are slowly lowered over time 2. PENETRATION – product or service is priced significantly lower than the competition PRICING STRATEGIES 3. COMPETITIVE – prices are set at the same level or slightly lower than the competition – – most common pricing strategy companies compete on some other element of the marketing mix. Promoting the product Advertising • The paid-for promotion of a business’s goods and services over a variety of mass media to target a market of consumers. • Ads give the consumer information about the product Eg. What, Where, Why, How • Ads vary depending on the stage in the Product Life Cycle Eight Steps in Advertising 1. Market research 2. Setting out aims 3. Budgeting 4. Choice of media (television, newspaper/magazines, radio, web, etc) 5. Choice of actors and players 6. Design and wording 7. Co-ordination 8. Test results ADVERTISING AND PROMOTION 1. Use Existing Ads • Saves money, but markets must be similar. 2. Translate Ads • Replicating an ad campaign in another language is difficult. 3. Create New Ads • Expensive, but the Internet has made customizing promotions much easier. Promoting the product Sales promotions • Used to encourage the consumer to buy the product Eg. coupons, contests, premiums, samples, and special events WHAT IS PLACE? • Refers to where the organization’s goods or services are made available for sale. • It is the mechanism (channel of distribution) through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. HOW TO SELL? • Businesses must determine the best way to sell their product. • Sales methods or venues may include: – Selling products to retailers – Opening their own retail store – Selling online (e-commerce) – Catalogues – Television – Telemarketing – Vending machines LOGISTICS • Logistics consists of the flow of goods and services both into and out of an organization. • Consists of: – – – – transportation inventory management warehousing and storage packaging Product Channels Distribution Placeofment • The paths of ownership that the goods follow as they pass from the producer to the consumer. • The product does not change as it moves through the channels • Intermediaries take possession of the goods before the final consumer does and adds an additional cost to the product in order to make a profit CENTRALIZED VS. DECENTRALIZED STRATEGY CENTRALIZED STRATEGY • all of a company’s manufacturing and marketing is performed in one location. DECENTRALIZED STRATEGY • a company sets up a manufacturing plant in another nation; • or hires a sales force there; • or even licenses its brand to a local manufacturer; • does not perform all manufacturing and marketing in one location. HOW TO ENTER FOREIGN MARKETS 1)E-COMMERCE • The use of the Internet to sell products and services to customers in a much larger areas than could be reached through a traditional retail location. • Anywhere in the world can be an international business. • Quality of the website is important. • Cost of shipping to consumers and payment options. HOW TO ENTER FOREIGN MARKETS 2) SALES AGENT/AGENCY • An individual hired and paid a commission by a company to market its product to potential buyers and distributors, often in a foreign country. • E.g. men’s clothing rep; show rep; giftware rep; jewellery rep; • Can provide: – – – – Info on local business practices Help navigate through a country’s complex trade laws Offer a database of good sales leads Appropriate marketing and distribution strategies for the product in that country. HOW TO ENTER FOREIGN MARKETS 3) TRADE SHOW • A collection of manufacturers and distributors of similar products who: – – – rent space set up display booths sell to registered buyers seeking products for their retail businesses. • Can save them hundreds of hours and thousands of dollars in buying trips. HOW TO ENTER FOREIGN MARKETS 4) BRANCH PLANT • Building and staffing a branch plant is the most expensive market entry strategy, but could be the most effective. • The three major advantages to owning a branch plant in a foreign country are: •Shipping costs are lower •Import regulations and tariffs are not an issue •Product modifications are easier HOW TO ENTER FOREIGN MARKETS 5) LICENSING AGREEMENT • Is a contract giving someone the right to use a patent or trademark. • Manufacturers pay the owner of the trademark a fee, usually a royalty, which is a percentage of the sale of the licensed product. Three types of licensing agreements: a.Manufacturing agreements – the rights to manufacture a product – the rights to sell a product (exclusive distribution deal) b.Distribution agreements c.Franchising agreements – grants the ownership of a manufacturing or distribution company to a local franchisee HOW TO ENTER FOREIGN MARKETS 6) ACQUISITIONS • Buy the company it competes with in a foreign market. • Then can close it or use its marketing connections to expand your own market. • Can be the most effective way for a company to deal with competition in a foreign or domestic market. The Marketing Mix - Place • Products are distributed to consumers in foreign markets in three main ways, each dependent on the type of product that the company is selling. Global Distribution Strategies • Industrial Sales Representatives • Retail Marketing • Specialty Retail Distribution Chann E-Commerce Vending Machines Catalogues Television Shopping Telemarketing The Marketing Mix - Place • Industrial products, such as pulp and paper, agriculture products, steel, minerals, and chemicals are sold by an industrial sales representatives • Consumer goods can be sold through retailers, and through specialty channels. The Marketing Mix PLACE • Does the land affect transportation of product within country? • Contract distribution out to local experts, open a foreign office, work with a foreign company? How will you sell your product and where? Marketi ng Researc The crystal ball of successful Marketing Marketing Research The collection and analysis of information that is relevant to the marketing strategy of a product or service. Consumer Research • Discovers what type of product consumers want and predicts the overall sales potential of the product Consumer Research cont’d • A FOCUS GROUP is a • company-arranged meeting of potential consumers to gain feedback on a product The group provides their opinion on various aspects of the product and they are compensated for their participation Market Research • Identifies specific groups of consumers who would use a particular product or service • Profiles of the consumer are developed • Advertising and promotion are created to ‘match’ the consumer • Information is collected both through: • Primary Data – first person surveys • Secondary Data – Internet, periodicals, publications, country organizations Primary Data • information collected directly from the marketplace by a marketing research company or by the company that wishes to use the information – – – – – Surveys Tests Interviews Data mining Focus groups Secondary Data • Easiest to collect because other organizations or government agencies have already gathered it. Marketers just use what information they see as useful. Examples are: – The internet – Periodicals and publications – Country organizations Demographics – The characteristics of and statistics about human populations • Age • Gender • Family Lifestyle Motivation Research • Analyzes the psychology of consumer behaviour • The rational (thinking) and emotional (feeling) motives behind why we buy particular products •Ford Windstar was the first minivan in the industry to receive the Quadruple 5-Star crash test rating.† •All Ford Windstars include the Personal Safety System, an advance safety technology. Other Considerations • Thorndyke’s Pleasure/Pain Theory • Maslow’s Hierarchy of Needs • Rational/Emotional Theory • Purchasing profile Motivation Research • Thorndyke’s pleasure/pain theory – peoples behaviour is controlled by a desire to either achieve pleasure or avoid pain • Maslow’s hierarchy of needs – arranges needs in ascending order of importance, with the most basic need at the bottom and, once fulfilled, the next higher level need becomes more important Global Marketing • Consumer Profiles – Motivational Profile • Thorndyke’s Pleasure/Pain Theory Edward Lee Thorndyke. 1874-1949 Global Marketing • Consumer Profiles – Motivational Profile • Maslow’s Hierarchy of Needs ABRAHAM MASLOW. 1908-1970 Global Marketing • Maslow’s Hierarchy of Needs •The big question for marketers after all of this is: So What? • In an attempt to offer an answer to this, consider Altoids . . . Global Marketing Altoids Mints This is the British mint packaged in a tin. A variety of advertising campaigns were available for the N.A. market, depending on where the primary market for the product was determined to be according to Maslow. SAFETY LEVEL “Fresh Breath, Less Stress” BELONGING LEVEL “Offer Chapter one 11 – to a friend!” International Marketing Global Marketing Altoids Mints The pricing, packaging, and quirky “this-is-not-foreveryone” advertising message that was chosen attracted consumers at the ESTEEM LEVEL Pricing Research • Local market prices • What price can the company sell the product for while still making a profit • How will price affect demand?? • $2.99 vs. $3.00 Competitive Research • Studies similar products on the market • Avoid repeating the same mistakes • Opportunities for new products Product Research • Examines each detail of the product or service and analyzes what impact these details might have on the market • Colour, packaging, flavour, size, texture, scent Advertising Research • What are the most effective forms of advertising? • How should we design are ads to target the consumer? UNIT #3 The International Marketing Mix STANDARDIZED VS. ADAPTED MARKETING MIX STANDARDIZED MARKETING MIX Selling largely the same products and using the same marketing mix approaches worldwide. It does not take into account any barriers presented from specific countries. Rather than listening to what you like, they tell you what to want! REASONS FOR STANDARDIZATION 1.The standardization of consumer behaviours in many countries. 2.The emergence of similar new categories of consumers on the international level (new hybrid market). 3.The introduction of international themes and icons thanks to the television networks and media icons (movie stars and supermodels). Getting Attention: Is an ad’s first job. If that ad doesn’t gain attention, it doesn’t matter how many people are exposed to it. Magazine and newspaper readers flip through pages without paying attention and radio listeners and television viewers can engage in different activities or leave the room. Some attention getting devices are available, such as: • A large headline • Shocking or catchy statements • Humor • Photo • Attractive models • Babies • Animals • Special effects • Others However, the attention-getting device cannot detract from-and hopefully lead to-the next step, holding INTEREST. Holding Interest Tone and language of the ad must fit with the experiences of the target customers. • Informative • Persuasive • Celebrity Endorsements • Print ads should be arranged to encourage the eye to move smoothly through the ad (for example: upper left headline, middle copy, lower right logo or brand name). Arousing Desire: Arousing desire to own or use a product is one of the ad’s most difficult job. • Understand how the target customer thinks, behaves and makes decisions. • Must convince the product can meet customers’ needs. • E.g: Testimonials, Product Comparisons • Focus on one selling point instead of the whole story (leave it to the whole promotional strategy). Obtaining Action Must get the customer past considering the product to actually trying it or receiving a demonstration. SIVA Product → Solution Promotion → Information Price → Value Placement → Access AIDA Basically, the overall marketing strategy should determine what the message should say. As a guide to message planning, marketers can use the AIDA formula (concept); getting ATTENTION, holding INTEREST, arousing DESIRE, and obtaining ACTION. ADAPTED MARKETING MIX Producer adjusts the marketing mix elements to each target market of the hosting countries targeted by the campaign. They abide by the barriers each different market presents and the culture of each society. MARKETING MIX ADAPTATION In India, McDonald’s serves chicken, fish, and vegetable burgers, and the Maharaja Mac—two allmutton patties, special sauce, lettuce, cheese, pickles, onions, on a sesame-seed bun. REASONS FOR ADAPTATION: 1.The socio-cultural component • Includes local factors from: – – – – religion social and commercial habits rules of conduct and ethical norms culture (national, sub-culture, corporate) • Adjust to the main features of the hosting culture and society. REASONS FOR ADAPTATION: 2.The politico-legal component – the nature of the political system – the restrictions imposed on advertisements and the regulations related to information and to certain products (such as spirits and tobacco) ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern